Why doesn’t Narendra Modi place a Limit on Maximum Income?

If the purpose of withdrawing bigger denomi-nation notes of Rs 500 and 1000 was to make it difficult for people to store and use black money, why have new big denomination notes of Rs 500 and Rs 2000 reintroduced? The idea of withdrawal of big denomination notes was that it’ll become difficult for people to store and use black money easily. It raises a question on the motive of the government. Soon black money will be generated in new currency notes. It is unimaginable that all the corruption in the government system will come to an end and political parties will stop using black money to contest elections. There seems to be some truth in the allegation that the Bharatiya Janata Party converted all its black money prior to the withdrawal announcement to gain an advantageous position in the forthcoming Uttar Pradesh elections vis-a-vis its opponents.

It is a well-known fact that a common use of black money is to contest elections. During the last Assembly elections in UP, a Hindi daily Hindustan predicted that each of the candidates of the four big parties—Bahujan Samaj Party, Samajwadi Party, BJP and Congress—would spend on an average Rs 125 crores for their election campaigning when the limit imposed by the Election Commission was Rs 16 lakhs. This implies that every candidate of the major parties was spending on an average Rs 1 crore of black money. It is an open secret that politicians keep black money. So far in the drive to get black money deposited we have not heard of a single politician or a party President or Treasurer having gone to any bank to deposit their money. It is important to know what the parties are doing. Because unless there is curb on the usage of black money in the elections the existence of it will not end. While the government is very tough with citizens found with more than merely Rs 2.5 lakhs, it didn’t take any action against Maharashtra Cooperative Minister Subhash Deshmukh whose vehicle was found with Rs 91.5 lakhs in old currency notes.

The common people have been harassed while the politicians must have figured out ways to convert their black money and also how to use it in future. The government is guilty of having wasted so much public time on unnecessarily forcing people to stand in long queues.

The government has announced various kinds of limits. There was a limit of Rs 10,000 on withdrawal at a time from savings bank accounts with maximum limit for a week being Rs 20,000. This limit, both for one time and the week, has now been raised to Rs 24,000. The limit for withdrawal from current account is Rs 50,000. First, it was announced that the limit on withdrawal from Automatic Teller Machines would be Rs 4000 one time and Rs 8000 over a week, then it was reduced to Rs 2000 per card per day which has been increased to Rs 2500 now. Limit on exchange of old currency notes from the bank is now Rs 2000. If there is a marriage in family a withdrawal of upto Rs 2.5 lakhs can be made but this provision has not been implemented so far. A number of families in which marriages were to take place were put to great inconvenience and embarrassment after November 8. Some select petrol pumps allow Rs 2000 cash on debit cards. Farmers can withdraw upto Rs 25,000 per week against loans. Government employees upto Group C level can be given Rs 10,000 cash from their November’s salary. Deposits made above Rs 2.5 lakhs will require PAN card.

Because of imposing limits of all kinds the people are really at a loss, especially the ones who don’t have bank accounts or any of the various cards mentioned above. People have struggled to get not their black money but legitimate income converted to new notes. If one needs bigger amounts now one will have to plan in advance and pay a number of visits to the bank to ensure that one has the required amount by the deadline. But a medical emer-gency comes unannounced. How are people to deal with this kind of situation? Even others will hesitate to help now as they will worry about their own cash situation. The influential people are getting their notes converted without standing in the queues. Doors of banks open for them outside the office hours and probably the manager gets their transactions done from his office itself.

If the government has decided to place limits on the withdrawal of amount from banks, they should also place a limit on other ways of money transactions. By placing these limits in a way Narendra Modi has placed a cap on our expenditure. He has similarly placed a cap on how much one can spend on a wedding, in which people in our country have a tendency to overspend beyond their earning capacity. In fact, it is a good time, while the size of the economy has temporarily shrunk because of unavailability of money, to also place a limit on people’s incomes. Dr Rammanohar Lohia had famously said that the difference between the income of poor and rich should not be more than ten times. That is a good standard.

There are professions in which there is unlimited possibility of making money. After huge amounts have been made the earner tries to evade tax and thus creates black money. The minimum wages are already decided. The government should fix the maximum income as ten times of that. If the prices of essential items are kept under check and privatisation in education and healthcare ends, the people may learn to live on limited income. But the real question is: will the political parties change their ways of using black money in elections? Or, will the culture of commissions and cuts—which generates black money—end? Are the politicians and bureaucrats ready for it?

Noted social activist and Magsaysay awardee Dr Sandeep Pandey is the Vice-President of the Socialist Party (India). He was elected to this post at the founding conference of the party at Hyderabad on May 28-29, 2011.